Dow Off 11.81

NEW YORK -- Investors looking to take capital gains on stocks in the current year charged into the market Tuesday, sending prices broadly lower and volume up sharply.

But traders said the investors, apparently unwilling to abandon the stock market altogether, appear to be turning right around and rebuying the stocks they just sold. ``It`s called tax swaps,`` said Larry Greenwald, co-manager of the equity trading department at Sanford C. Bernstein & Co. ``People who have long-term gains are basically selling stock to lock in the lower longer-term tax rate and then buying them back.``

This maneuver nevertheless helped weaken stock prices Tuesday. The Dow Jones industrial average, which fell 2.67 on Monday, lost another 11.81 on Tuesday, to 1,914.37.

There has been some confusion among investors about whether Tuesday was the last opportunity to take capital gains in this year and still get the lower capital gains tax rate that exists in 1986. But tax experts said investors actually have until Dec. 31 to sell stocks in which they have gains. Under a 1980 law, investors who do sell stocks at a profit in the last five business days of this year can choose by next April 15 whether to report the gain on their returns for 1986 or 1987.

The GTE Corp., whose shareholders vote Wednesday on a corporate restructuring, fell 50 cents, to $59. Samuel Belzberg, the Canadian investor, sent a letter to GTE on Monday suggesting some alternatives. GTE, in which Belzberg said he owned a large stake, confirmed receipt of the letter but had no further comment.